What is Student-based Budgeting?

In the past, we’ve talked about the need to overhaul how Connecticut funds its public schools. Across the country, policymakers and educators are thinking about how we can do a better job of allocating money to schools.

Under the traditional funding model, resources are distributed to schools in the form of staff and dollars that are earmarked for specific purposes. Often, this distribution is based upon formulas that allocate staffing positions based upon the number of students at each school. Although this method of distributing resources to schools was likely designed initially to be fair, it shortchanges our neediest schools and creates several problems:

Even though different schools have different student populations with diverse needs, this funding model assumes that a “one-size fits all” strategy will work for all kids.

Funding that is designated to provide additional resources to the neediest student populations goes to the district, rather than the schools that the students attend.

Because the formulas are based upon staffing ratios, there is often a “cliff effect” where small increases in enrollment can drastically skew staffing ratios.

It is more difficult to hold schools and school leaders accountable for results when they lack control over budgeting and resources.

This funding system is so complicated that we sometimes feel pressure to meet many other needs before the needs of students.

Student-based budgeting (sometimes called “money follows the child,” “weighted student funding,” and “fair student funding”) attempts to solve many of these problems by shifting the focus of allocation to students’ needs, rather than strict staffing ratios.

In the student-based budgeting model, districts allocate dollars to schools (rather than staff), based upon the number of students enrolled, andweights are provided for specific types of students based on need.

When it’s well-implemented, a student-based budgeting system should result in greater equity and transparency, and it may also result in greater flexibility for school leaders if it gives them high levels of autonomy over their own budgets. This allows them to be more innovative and to spend their resources in a manner that is aligned with the needs of the students in their school.

Although this funding system is not a panacea, it can play an important role in a comprehensive strategy for district improvement. For examples of districts that have implemented student-based budgeting as part of a district improvement plan, see: Houston (implementing student-based budgeting since the 2000-2001 school year); Hartford (since 2008-2009); and Cincinnati (since 1999-2000).

Student-based budgeting has the potential to be a powerful tool for districts developing comprehensive turnaround strategies. It is one method of addressing the issues of equity, transparency, and flexibility within districts. However, student-based budgeting is challenging to implement, and isn’t the right solution for every district. Before implementing a student-based budgeting system, districts will need to make hard choices about how they allocate resources to schools, invest in professional development to train school leaders and district staff to use the new funding framework effectively, and consider barriers that may prevent a student-based budgeting system from working well in their district.